Amidst the ongoing student loan crisis in the United States, a significant number of borrowers are taking a stand and refusing to make payments on their federal student loans. In a recent survey conducted by Intelligent.com, it was revealed that 25% of 1,000 federal student loan borrowers had not made any payments at all since loan repayments resumed in October. Even more strikingly, 9% of those surveyed admitted to intentionally withholding payments as a form of protest, in hopes that their debts will be canceled.
The survey also shed light on the motivations behind this “boycott” of student loan repayments. Of the delinquent borrowers, 44% believed that their protest would lead to the cancellation of some federal student loan debt, while 28% expressed optimism that the government would cancel all student loan debt. While the outcome of this boycott remains uncertain, the vast majority of protesting borrowers are confident that their efforts will at least draw attention to the student loan debt conversation (86%) and potentially influence the election of political candidates who support loan forgiveness (64%).
Financial experts, however, caution against missing student loan payments for any reason. Jake Hill, founder and CEO of DebtHammer, advised that while the frustration behind the boycott is understandable, it is unlikely to lead to positive change. Hill emphasized that participating in the boycott could harm individuals’ credit scores and hinder future financial opportunities.
The survey also revealed that the primary reason borrowers have not resumed loan payments is financial hardship, with 69% stating that they cannot afford to pay. Additionally, 18% plan to hold off on payments until September 2024, as more severe consequences for missing payments will come into effect at that time. Even among borrowers who have resumed making payments, 94% reported facing financial challenges.
Many borrowers had pinned their hopes on President Biden’s loan forgiveness plan, which aimed to erase up to $20,000 in debt per borrower. However, the plan was struck down by the Supreme Court last year. Despite this setback, the White House has announced other initiatives to alleviate student loan debt, including the erasure of $127 billion owed by approximately 3.6 million borrowers.
It is important to note that the consequences of the student loan crisis extend beyond individual borrowers, impacting the broader economy and society as a whole. As the debate around student loan debt cancellation continues, the actions of these protesting borrowers serve as a reminder of the deep-rooted financial challenges faced by millions of Americans.
In conclusion, the refusal of a growing number of student loan borrowers to make payments highlights their frustration with the current state of the student loan system and their hopes for debt cancellation. While the effectiveness of this boycott remains uncertain, it underscores the urgent need for comprehensive solutions to address the student loan crisis and alleviate the burden on borrowers.
